Question: The binomial interest rate tree below misprices the following callable bond: $100 par value, 3 years of maturity, annual coupon rate of 5.25% payable yearly,

The binomial interest rate tree below misprices the following callable bond:

The binomial interest rate tree below misprices the following callable bond: $100 par value, 3 years of maturity, annual coupon rate of 5.25% payable yearly, and callable at $100.50 and at the par value in 1 year and 2 years from today, respectively. The fair value of the callable bond is $101.672166. What is the OAS of this bond? Please show the formula(s) and the interest rate tree(s) that you use, and the value at each node on the tree(s)

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